The phrase “trench warfare” comes to mind. On Friday evening the Greek prime minister, Alexis Tsipras, lobbed some choice words at his foes in Brussels, calling their proposed debt deal “absurd”. Days earlier, the International Monetary Fund had joined its allies in Brussels to fire a volley of criticism at Athens. The Greeks already had “significant flexibility” to get out of their budget mess, IMF boss Christine Lagarde said, as she urged Athens to repay the €300m instalment of its bailout loan due on Friday.

This could go on for several more weeks: Greece told the IMF it will have to wait until the end of the month to get its money, when it will “bundle” four payments together. And should the sides become more entrenched, this long-running war could still end in the disaster of Greek default.

In Washington, where the IMF is hunkered down, and in Europe’s finance ministries, the Greek stance is considered wilfully unreasonable. The Syriza government’s demand for the return of national pay bargaining, a relaxed timetable for pension reform and a lower budget surplus than that demanded by the EU, the IMF and the European Central Bank are all but ridiculed in Berlin, Helsinki and Riga.

As Greece’s chief creditors, the EU and the IMF want Greece to adopt flexible labour markets, immediate restrictions on early retirement and a budget surplus big enough to accommodate some debt repayments.

This is not about letting a leftist government off the hook, but about giving it more time

While much of what the radical leftists want seems unreasonable – especially the slow pace of pension reform, which in effect would allow tens of thousands of people in their late 50s to grab early retirement – it is the demands being made by Brussels and the IMF that are unconvincing and, worse, untenable.

Running a larger budget surplus is only going to destroy Greece, not build it up. As US economist Joseph Stiglitz and many others, including former IMF staffers, have pointed out, the troika of creditors badly misjudged the economic effects of the programme they imposed in 2010 and 2012.

“They believed that by cutting wages and accepting other austerity measures, Greek exports would increase and the economy would quickly return to growth,” Stiglitz said last week. “They also believed that the first restructuring would lead to debt sustainability. The troika’s forecasts have been wrong.”

The current proposals repeat the same mistake. Seven years after the crash, the Greek economy is still 25% smaller than it was at its previous peak, 10% of households have no electricity and youth unemployment is running at more than 50%. Tsipras and his finance minister, Yanis Varoufakis, may specialise in needling their creditors, but the troika also need to take into account the fact that Syriza has formed a legitimate, democratically elected government and cannot be told that its electoral programme is irrelevant.

So Lagarde and European commission president Jean-Claude Juncker must be the ones to table further compromises. Neither was in charge when the first Greek bailout set all sides on the current disastrous path. They should explain to Ireland and Portugal, also suffering austerity, that Greece is too weak to survive more bloodletting.

According to one estimate, Brussels needs to sanction only an additional €10bn of loans to get Athens through the next few months, after which a longer-lasting deal can be constructed. The troika should create the funds and stop insisting on surpluses as a prelude to meaningful talks.

Lagarde’s plan is simply too severe. This is not about letting a leftist government off the hook, but about giving it more time. Much more time.

Giorgos Stathakis, one of many former academics in the Syriza government, said last week: “We have a mandate from the Greek people to go on, to try to change the terms of the agreement.”

He and his colleagues are not going to give up on democracy, and as the end-of-June deadline draws closer, creditors should show the Greek people more respect. It’s time for a truce.

HSBC should focus on its jewel in the East

Here’s a good idea that (almost certainly) will not be announced by HSBC at its big strategy day on Tuesday: split the bank in two, and let only the Asian business base itself in Hong Kong.

UBS analyst John-Paul Crutchley is the author of the inspired demerger idea, which starts by arguing that “taking the accumulated baggage of the last three decades home may not be the best course of action”.

Baggage may seem a harsh description of the non-Asian parts of HSBC, including its UK retail banking operation, but Crutchley reckons the Hong Kong Asia-Pacific bank accounts for 80% of HSBC’s market valuation while deploying less than half the equity. It is the jewel. Indeed, the analyst reckons HSBC’s share price could be twice the current 619p if the group had decided in the 1980s to stick with its Asian franchise and not pursue all the deals and acquisitions elsewhere.

That observation illustrates the fact that HSBC management’s head-scratching over where to base the bank is something of a sideshow. Dodging the full impact of the UK bank levy by redomiciling the whole shebang to Hong Kong might save $1bn a year. But, even if one assumes such a saving is worth $12bn in today’s money, that’s only the equivalent of 44p on the share price. The bigger question is: what’s the best way to manage this vast sprawling group?

A demerger is not a cure-all but it would deliver a few advantages. The Hong Kong end could concentrate on combating increased competition from Chinese banks. Rump HSBC could be more vigorous in allocating capital to the parts of the business generating better returns. And, since regulators are piling heavier capital and compliance costs on very big global banks, both bits might benefit from being part of smaller organisations.

It’s an idea HSBC is highly unlikely to adopt. But a dose of bold thinking is arguably exactly what it needs to awaken a slumbering share price. Flogging the Brazilian and Turkish operations – Tuesday’s likely highlights – probably won’t be enough to excite shareholders.

How US oil poured cold water on hopes for a climate deal

Staving off catastrophic climate change is going to require a global effort that unites disparate corporate and sovereign entities. So it is deflating to see a welcome outbreak of common sense from some major oil groups overshadowed by dissent from powerful rivals.

When six of Europe’s largest oil and gas companies, including BP and Royal Dutch Shell, expressed backing for a global carbon pricing system last month, it boosted hopes that the fossil fuel industry was getting serious about fighting global warming.

But last week the head of US company Chevron attacked the initiative, saying it would not work because consumers would not tolerate high energy prices. Its larger peer, ExxonMobil, has also shunned a joint industry stance.

If this dissonance is replicated among global governments, there is little hope for a substantive deal at the UN climate change conference in Paris later this year. Big oil has lost its chance to set an example.